April 14, 2008

October 20, 2008

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The 150 men and women who make up the Indiana General Assembly have finished their annual freak show, folded their tents, and departed from Indianapolis. In their wake, they left some truly terrible legislation and another record of neglect for the interests of Indiana's too-long-suffering population.

What was wrong with this session of the General Assembly? Your local editor will not grant me the space to be either sufficiently complete or detailed.

Let's start with the governor's Major Moves program. It just squeaked by, only after truly dumb amendments were put into the bill. Although the route for Interstate 69 has been set by numerous studies, this Legislature decided it is not to run through Perry Township in Marion County. Dumb. With I-69, Perry Township would be the greatest beneficiary of I-69. The failure to control land developers in that township has already created a traffic nightmare along State Road 37. That four-lane road was built to be the route of I-69, but a toothless Indiana Department of Transportation could not prevent development along the 37 corridor. During the past 25 years, we have generated grotesque sprawl from Interstate 465 south beyond Bloomington.

There is to be no toll on I-69 from Indianapolis to Martinsville. Dumber. This will move traffic from state roads 37 and 67 to I-69, clogging that road. There is no rational reason for this exclusion other than pernicious local politics.

From what I can tell (ever try reading a state law?), the Legislature did resist the temptation to lower toll rates for residents of counties through which the northern Indiana Toll Road passes. Why would a citizen of Allen or DeKalb County not be eligible for the same discount as that offered to drivers from Steuben County? Initially, this was an effort to help commuters. OK, but give a discount based on behavior (commuting), not place of residence. Fortunately, it seems, foolishness did not prevail here.

However, we have another homestead tax credit for owner-occupants of residential property. That applies to this year, while next year the homestead exemption (a reduction in the assessed value of property) will be raised from $35,000 to $45,000. These are yet more subsidies for people who tend to vote and further slaps in the face for renters and for businesses. These irresponsible policies induce people who cannot afford to own homes to buy them nonetheless, a practice that increases foreclosures.

The Legislature did not restructure government financing by shifting child welfare costs from counties to the state. This failure was a direct insult to the counties with disproportionate caseloads through no fault of their own. Finally, a 2-percent cap will be phased in for all types of property by 2010. This means your property tax bill cannot exceed 2 percent of the assessed valued of your property. This is another arbitrary way to destroy the fiscal independence of local governments. But what do our legislators care, as long as they get re-elected?

While local governments are being strangled by the restrictive policies of the Legislature, that body provided no relief by expanding local governments' powers to raise taxes. Even consolidation of the Indianapolis and Marion County township fire departments was denied. Why should legislators have the power to decide who provides your local services?

Of course, the General Assembly did nothing to reform itself. It did not establish a nonpartisan method of redistricting seats in the Legislature. It did not reduce the excessive health care insurance it provides for its members and their spouses at taxpayer expense.

A bill reducing public oversight of telecommunication companies was passed, on the theory that it would increase competition. But consolidation has been, and is, going on in that industry. There is no assurance that these gobbling, growing oligopolies will lower their prices or provide better services. Only ease of entry into the business and new technology will give consumers their anticipated benefits.

And what is the worst part of all this? We will re-elect in November virtually every representative and senator who stands for office. If voters do not change the leadership in both parties, we will maintain the same tendency toward irrelevance and impropriety that has dominated the Indiana General Assembly for the past quarter-century.

Marcus taught economics more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to mortonjmarcus@yahoo.com.

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Marcus is director emeritus of the Indiana Business Research Center at the Kelley School of Business. He has contributed to local and state economic development efforts since 1970. In addition to teaching economics at Indiana University for 33 years, Marcus has served six Indiana governors as an adviser on taxation and economic development. None of his advice has been taken. Marcus was the governor’s liaison to the U.S. Bureau of the Census from 1979 to 2003, has testified before Congress, appeared on the PBS “News Hour with Jim Lehrer,” and consulted with firms and governments throughout the United States and in Southeast Asia. A native of Brooklyn, N.Y., Marcus has earned degrees in economics from Roosevelt University in Chicago, Washington University in St. Louis, and the University of California-Los Angeles. He and his wife, Rebecca, reside in Indianapolis. They have three children, six grandchildren, six cats, a dog and a heavy mortgage.

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